Dairy Farmers Push for Stronger Protections

With milk and dairy prices in the middle of another major slump, American dairy farmers are ratcheting up pressure on Congress to pass new dairy protections, including a stronger safety net and price protection programs.

For the past several years, dairy production in the U.S. has been in the midst of a fiscal roller coaster. Countless dairy farmers across the country, buffeted by high operation costs and low prices, either have gone out of business or have experienced devastating losses to their net worth. The 2008 dairy depression, for example, saw dairy farmers’ net worth drop by $20 billion between 2007 and 2009. Continued low profit margins throughout 2009 added to the economic pain, with many dairy farmers losing money for every gallon of milk they produced.

Recent proposals by Minnesota Representative Collin Peterson seek to address many of the issues facing dairy farmers today. Most pressing is a need to update current dairy programs. Many of the federal programs and price protections are holdovers from the 1930s and cannot address the needs and concerns of 21st century dairy farmers.

Peterson’s Dairy Security Act, introduced to the House last fall, would include price protections and market stabilization. The price insurance elements would consist of a voluntary opt in for dairy farmers. Federal protections would kick in if dairy prices dropped below a certain point, offering farmers more targeted protection than current direct payments. The market stabilization element would require participating farmers to limit production when prices were falling, preventing the freefall of 2009 that ruined many dairy farmers.

While some farmers are uncomfortable with mandated production reductions, the program would be voluntary. Only farmers who opted into the price protection would be required to participate in the market stabilization. In addition, since Peterson’s plan eliminates direct payments, it is being touted as a major money saver. With the House looking to decrease agricultural spending beyond the Senate’s $24 billion, Peterson’s bill may finally pass as a way to both increase farm spending cuts without sacrificing vital services.

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Written by: Justin Ellison / Farm Plus Staff Writer